Vietnam Bank Bond Yields Cool to 8.5% as Funding Costs Ease

Overview

Bank bond issuance rates in Vietnam are showing signs of cooling, with the average coupon falling to 8.5% per year, down 0.2 percentage points from the previous month. The easing is led by state-owned banks Vietcombank (VCB) and BIDV, which issued bonds at 7.8-8%, while some private banks continue to pay up to 10%. This development is significant for the banking sector as it signals a potential peak in funding costs.

Key Facts

• Average coupon on bank bonds issued in early August 2026: 8.5% per year, down 0.2pp from 8.7% in July.
• 13 bond lots issued in the first weeks of August, raising nearly VND 15,000 billion.
• Vietcombank and BIDV issued bonds at 7.8-8% coupons.
• TPBank led private banks with a 9.1% fixed coupon on a 3-year bond.
• Sacombank paid 10% fixed coupon to raise over VND 3,600 billion.
• PVCombank issued at 9.8%.
• Bond yields are up about 3pp year-on-year and 2pp since the start of 2026.

What Happened

According to data from the Hanoi Stock Exchange, Vietnamese banks have issued 13 bond lots in early August, raising nearly VND 15,000 billion. The average coupon rate has declined to 8.5% per year, down 0.2 percentage points from the previous month, indicating a cooling after a period of rapid increases. The market saw several bonds issued at 7.8-8%, primarily from state-owned banks Vietcombank and BIDV. In the private sector, TPBank led with a fixed 9.1% coupon for a 3-year bond.

Despite the overall cooling, some banks continue to pay high rates to attract funds. Sacombank issued bonds at a fixed 10% coupon to raise over VND 3,600 billion, while PVCombank paid 9.8%. These rates are several percentage points higher than some long-term savings deposit products. The article, citing data from the Hanoi Stock Exchange and analysis from ACB Securities, highlights that banks have increased bond yields by about 3 percentage points year-on-year and 2 percentage points since the start of the year.

Market Context

The cooling of bank bond yields comes after a period of intense competition for funding, which pushed average rates to 8.7% last month, the highest in years. Banks have turned to the bond market to secure medium- and long-term funding as traditional deposit channels face challenges. The affected tickers include Vietcombank (VCB, HOSE), BIDV (BID, HOSE), TPBank (TPB, HOSE), Sacombank (STB, HOSE), and PVCombank (PVB, UPCOM). Recent price action shows VCB closed at VND 60,000 on August 25, 2026, up 0.84%, while BID closed at VND 36,900, STB at VND 74,900, and TPB at VND 14,600 on August 24, 2026.

Strategic Significance

The easing of bank bond yields suggests that funding costs for Vietnamese banks may be peaking, which could support net interest margins in the coming quarters. State-owned banks like Vietcombank and BIDV are leading the trend, reflecting their stronger deposit franchises and lower risk premiums. For private banks, the persistence of high coupons indicates ongoing funding pressure, but the overall direction is positive. The expectation of further rate cuts, supported by SBV policies and a weaker USD, could provide additional relief. This is a key indicator for investors monitoring the banking sector’s profitability.

What to Watch

• Further bond issuance data from the Hanoi Stock Exchange in the coming weeks to confirm the downward trend.
• SBV policy actions, including open market operations and reserve requirement changes, that could affect liquidity.
• Q3 2026 earnings reports from major banks, which will show the impact of funding costs on net interest margins.
• Global factors such as oil prices and geopolitical tensions that could influence interest rate expectations.
• Any changes in deposit rates, which are closely linked to bond yields and overall funding costs.